Treasury Complained About Solyndra Decisions-Emails

Friday, 07 Oct 2011 08:46 PM

 

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WASHINGTON - A top U.S. Treasury Department official complained the Energy Department kept Treasury in the dark about the precarious financial situation of Solyndra, a failed solar panel maker that had received government backing.

Mary Miller, Treasury's assistant secretary for financial markets, emailed the White House budget director in August with her concerns only two weeks before Solyndra filed for bankruptcy and was raided by the FBI, according to excerpts released Friday by Republicans investigating the failed company.

The investigation into Solyndra has become a political headache for the Obama administration, which has staunchly defended decisions made on the $535 million loan guarantee under a program designed to spur clean energy technology.

When the company ran out of cash, the Energy Department agreed in February to a plan to restructure its debt. In that restructuring, some $75 million in private investment was ranked ahead of the government in the event of bankruptcy. That private fund was backed by a prominent Obama fundraiser.

The loan was provided by Treasury's Federal Financing Bank and was guaranteed and monitored by the Energy Department.

Treasury Department lawyers did not think the law allowed for the government loan to be subordinated, Miller said in an Aug. 17 email to Jeffrey Zients, deputy director of the White House Office of Management and Budget.

"In February, we requested in writing that DOE seek the Department of Justice's approval of any proposed restructuring. To our knowledge, that has never happened,"' Miller said in the email.

She also complained that "DOE has not responded to any requests for information about Solyndra" despite requests dating to July 2010, leaving Treasury to get its information solely from the OMB.

But emails provided by the administration showed that top staff at the Energy Department discussed the concerns with the chief financial officer of Treasury's Federal Financing Bank.

"Ultimately, DOE's determination that the restructuring was legal was made by career lawyers in the loan program based on a careful analysis of the statute," an Energy Department spokesman said.

A Treasury spokesman declined to elaborate on the contents of Miller's email.

The House Energy and Commerce Committee has now requested Treasury turn over all documents related to the Solyndra loan guarantee. (Editing by Eric Walsh and Bill Trott)

© 2014 Thomson/Reuters. All rights reserved.

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